Strategy in TECH...
The University of Michigan (U of M) has released a preliminary reading of its Index of Consumer Sentiment (ICS) for April and it shows a continuing and startling slide in consumer sentiment, dropping another double-digit percentage from last month’s reading. In fact, this preliminary reading for April is the second-lowest reading in consumer sentiment in the entire 73-year history of the survey!
The latest reading on the current mood of consumers – the Consumer Confidence Index produced by The Conference Board – dropped by 7.2 points in March to a reading of 92.9. This is the fourth consecutive month of decline. The Expectations Index, consumers’ expectations for conditions within the next six months, dropped a startling 9.6 points to 65.2…the lowest level in 12 years.
No doubt about it, for the last few weeks, storm clouds have been gathering as many are seeing a darkening outlook for the U.S. economy. In just the last few days, three key pieces of data – red flags, really – suggest we all need to be vigilant in tracking where the economy is headed. These three pieces of data include: 1) another consumer survey showing eroding confidence; 2) key retailers warning of slowing sales from tariff increases; and 3) a new Fed estimation that the GDP will contract -2.8% in the first quarter of 2025.
The Consumer Confidence Index (CCI), one of two major indexes tracking consumer sentiment on the U.S. economy, dropped in January, following what appeared to be a turning point to the negative side in late December. The CCI, a monthly survey of consumers conducted by The Conference Board and widely followed by economists as a reliable gauge that probes consumers’ thoughts on the economy – both in a rating of their present conditions…and in their rating of the near-term future prospects.
What does this unexpected decline mean for the economy?
A key metric of the U.S. economy is consumer confidence – a reading of how confident consumers feel about the economy, both currently and in the near future. A confident consumer helps stimulate the economy by freely spending their money, as compared to an unconfident or insecure consumer who will instead pull back on spending to hold on to their money. Now, three major surveys that offer key readings on consumer sentiment in July show big gains in confidence – a bullish sign for the economy.
A new analysis that correlates consumer confidence by income level has produced a shocking red flag for any business that offers goods and services to the luxury customer – as do many custom integrators. Fire up your sensors and watch closely to see if clients in your market are subject to this alarming trend.
While there’s no question that the economy continues to expand, certain indicators are sending chills down economists’ spines – and the latest Consumer Confidence Index is one of those indicators. According to the latest data from The Conference Board (TCB), the Consumer Confidence Index (CCI) declined in November in a sign that consumers’ attitudes about the economy are turning cold.
Here’s some good news! In a report by the National Association of Home Builders’ writer Fan-Yu Kuo, we learn that consumer confidence in March jumped to its highest level in a year. This is the second month of increase for consumer confidence, after a more modest increase in February. This mini-trend suggests that confidence is building in consumers about their future…after a rough year.
Political newsletter Axios ran a surprising graph this week showing a stunning disconnect between the confidence of consumers – measured by the Conference Board’s Consumer Confidence Index – versus the confidence of CEOs (tracked separately by the Conference Board). While it is not entirely clear just what the ramifications may be of this huge disparity in how these two groups are feeling about the economy – it is nonetheless a notable disconnect.
The Conference Board, in conjunction with Nielsen, announced on Tuesday that consumer confidence, a widely watched economic indicator, fell in November for the fourth straight month in-a-row. Consumers, it seems, are concerned about the current business climate and employment outlook. Even so, the level remains historically high and should not provide too much of a damper on current holiday spending by consumers.
